20 June 2019

Address to the Bloomberg Buy-Side Forum, Sydney



Thank you, I am delighted to deliver my first speech as the Assistant Minister for Superannuation, Financial Services and Financial Technology.

I feel like I’m back on my old stomping ground. In the 20 years of a life before politics, I worked in banking, finance, funds management and investment and superannuation. And in my new role as Assistant Minister, I intend to take a practical approach drawing on that experience.

For this portfolio it is a privilege indeed to have worked in both retail and industry superannuation, which gives me a unique perspective on superannuation and its intricacies, histories, complexities and vagaries.

On entering the Senate I was appointed as the Chair of the Senate Standing Committee on Economics where I had the opportunity to not only scrutinise legislation but also hear from regulators and stakeholders about the challenges they face in a rapidly changing financial economy.

I am honoured to be a part of the Morrison Government’s economic team. As an integral part of our plan for a stronger economy, we are continuing to restore trust in the financial system and deliver better consumer outcomes. 

And on that note, today, I will focus my remarks on one of the largest sectors of the financial system: superannuation.


My mother always told me that a lady should not reveal her age, but unfortunately I’m certain you will be able to work it out for yourself when I tell you that Australia’s superannuation system is the same age as my professional life. 

I started working in 1992 – the same year that compulsory superannuation was first introduced. Twenty-seven years on, and Australia’s super system is around $2.8 trillion in funds under management or around 145 per cent of Australia’s GDP, and there are more than 15 million Australians with a superannuation account.

The sheer size of these numbers – the volume of money – can make your head reel. And there is no shortage of people with bright ideas as to how that the superannuation system and its mandate can be fashioned to build a “better” nation. 

But when legislating we must remind ourselves to put awe-inspiring aggregates and industry ambitions aside. We must never forget the most important foundation – the touchstone – of Australia’s compulsory superannuation system: savings belong to members.

The purpose of superannuation is to increase savings to provide members’ income in retirement – either in addition to, or instead of, the Age Pension.

As a government, our first obligation must be to deliver better member outcomes – more money in retirement. So our focus must be on improving the efficiency of the system, lowering costs and promoting informed member choice and competition.

It falls to government to steadfastly maintain this focus for the sake of future generations. That sounds lofty, but it is actually practical. We know that normal people experience financial myopia — a short-sightedness where someone in their early 20s or 30s simply can't imagine what life will be like — or what wealth will be needed — in retirement.

So it's hard to make the most optimal decision. And for that reason, it is incumbent on the Government to make sure the compulsory system — where nearly $1 in $10 is quarantined for as much as 40 years — is working in the best interests of members — first and foremost.

Superannuation challenges

And, as is well-documented, there are several challenges with the way our superannuation system is operating.

The Productivity Commission report said the superannuation system as a whole has served Australians reasonably well, delivering solid investment returns and providing significant flexibility and choice in how members’ balances are invested and drawn down.

Yet the report found a number of structural problems in the system and concluded that the prevalence of unintended multiple accounts, pockets of entrenched underperformance and the sheer complexity of navigating the system have eroded members’ trust in the system as well as their balances.

The Financial Services Royal Commission also uncovered disturbing deficiencies in the conduct within some financial institutions.

Both the Royal Commission’s recommendations and the PC’s recommendations lend weight to many reforms that the Government has been pursuing in superannuation.

This includes measures in the Protecting Your Super package and the Member Outcomes reforms passed by the Parliament prior to the election.

Royal Commission

The Government has committed to taking action on all 76 recommendations of the Royal Commission, and in some cases is going further than Commissioner Hayne prescribed.

This includes 15 recommendations, and one additional measure, specifically for the superannuation industry.

One of these is a recommendation to ensure superannuation fund members only have one default account – to stop the proliferation of duplicate accounts — which is consistent with the PC’s recommendation.

Commissioner Hayne also recommended clarifying ASIC and APRA’s regulatory roles and powers in superannuation, with ASIC becoming the primary conduct regulator.

Other recommendations include protecting members by clarifying and strengthening the anti-hawking provisions and limiting the deduction of advice fees.

So far we have passed legislation to fully enact two recommendations of the Financial Services Royal Commission relating to superannuation.

We have also consulted with industry on the merits of universal terms for insurance in MySuper products. We have also followed the Royal Commission’s recommendation and progressed consultation with Aboriginal and Torres Strait Islanders across the country on difficulties they face when making binding death benefit nominations.

The Government is continuing to address the remaining recommendations and will be consulting with relevant regulators and industry throughout the year.

Productivity Commission Inquiry Report into Superannuation: Assessing Efficiency and Competitiveness

There is some cross-over with the Productivity Commission’s landmark report — a report that presents a large body of analysis and recommendations that propose fundamental changes to the superannuation system.  

In fact, the report contains 31 recommendations. Several of the recommendations endorsed existing government policy and recently passed legislation.

Some of the PC’s key recommendations include:

  • one default superannuation account for each person – echoed by Commissioner Hayne;
  • elevated outcomes tests for all APRA-regulated funds to remove persistently underperforming products;
  • an independent superannuation member advocacy body; and
  • changes to the role of the regulators. 

Our approach

The Government has prioritised its response by focusing on the PC’s recommendations that overlap with the Financial Services Royal Commission.

For example, the Government has accepted the recommendations to realign the roles of the superannuation regulators and to make ASIC the lead conduct regulator in superannuation, and the recommendation that people should only have one default account.

We are also considering the PC recommendations for improving outcomes for default members.


The Protecting Your Super and the Member Outcomes reforms also address several of the PC’s recommendations. The PC estimated that members currently hold 10 million unintended multiple accounts at a cost of $2.6 billion dollars a year in unnecessary fees and insurance premia. TheProtecting Your Super legislation passed in February 2019 will clean-up the stock of multiple accounts, as the PC recommended. It will result in millions of Australians saving billions of dollars in fees and charges, ultimately meaning more in retirement for members. 

The Member Outcomes legislation passed in April 2019 seeks to improve the quality of superannuation products and starts to address some of the underperformance issues identified by the PC. The legislation requires trustees to assess the outcomes they are delivering to members and whether they are promoting the financial interests of their members.

Further to that, and consistent with another PC recommendation, the Government remains committed to the changes contained in the Putting Members Interests First Bill

The Bill will require superannuation funds to only offer insurance on an opt-in basis in relation to accounts of new members who are 25 years old, or accounts that have balances below $6,000.

Giving consumers a stronger voice

In an industry crowded with opinion makers, industry groups and lobbyists, it is important that consumers themselves have a stronger voice. As such, the government has announced our intention to establish a superannuation consumer advocate and will be consulting on the scope of its activities, funding and governance arrangements.

Retirement Phase

While efficient accumulation is imperative, there is also work to be done to ensure retirees’ money continues to work hard in the retirement phase. Currently, there is very little guidance on how retirees should draw down their savings when they reach retirement.

The Government is addressing this by developing a retirement income framework, which includes a covenant requirement for funds to develop a r`etirement income strategy. The Government is also exploring ways of expanding the range of retirement income products available.

Funds will need to consider the retirement income needs of their members, as well as provide guidance to their members to select the most appropriate retirement solution for their circumstances. 


Consistent with the PC recommendations, the Government commissioned a capability review of APRA, which is nearly complete.

And the Treasurer has stated publicly we are ‘positively disposed to a review of the retirement income system as recommended by the Productivity Commission.’ The Government will provide further information about the Review in due course.

Closing remarks

So you can see there is much going on – and that is only in one part of my portfolio. Don’t get me started on FinTech – we’ll have to save that for next time.

But it’s clear even from our discussion today that this is a crucial time for financial services in Australia and every person in this room will play a part in shaping the future of this vital industry. 

A lot is happening already and a lot more needs to happen, because financial services are the arterial veins of our economy.

A strong financial sector – where consumer outcomes drive progress and where credit is accessible to those who wish to invest and employ – builds confidence and sustains the economic growth that benefits all Australians.  

I believe we have cause for optimism — there are bright minds and good hearts in this room, and indeed in the industry more broadly.  I thank those here today who are playing their part in building a more prosperous nation.

And let me thank Bloomberg once again for hosting today’s forum — and to everyone here for the opportunity to update you on some of the priorities we see in the superannuation system.

As Assistant Minister, I look forward to meeting with you and your constituents as all these and other issues continue to unfold.

Thank you again, and enjoy the rest of the forum.